Of course, that growth didn't come without controversy. In , the store was taken to task for systematically over-weighing and overcharging certain food items.
Whole Foods denied that these errors were anything other than inadvertent. A leader in bringing natural foods into the mainstream, soon food retail giants like Wal-Mart and Kroger started selling in the category, Trader Joe's launched, meal-at-home kits like Blue Apron changed the way healthy eaters started shopping. Its stock price fell by more than half and activist investors like Jana Partners began to assert ownership rights, much to the dismay of Mackey , the only original founder still with the company at the time.
Though he admitted the company had changes to make, Mackey was against selling Whole Foods. Acquisition by Amazon made sense — Amazon had been dabbling in groceries and Whole Foods needed to better compete with the burgeoning natural foods market it helped launch.
But the founding ethos of the companies are as different as a chocolate pop tart and organic oatmeal. Amazon is the result of Jeff Bezos ' obsession with the efficiency and scalability of the Internet. The Seattle-based tech giant's vision is "to build a place where people can come to find and discover anything they might want to buy online" according to its mission statement, and to get it to you overnight. Whole Foods, meanwhile, is the result of an idealistic attempt to change the way people eat, making them healthier, while promoting sustainable, fairly harvested foods and ethically sourced meats.
Unable to thwart the pressure from investors to sell the struggling chain, Mackey was caught between his ideals and a need to keep afloat the business that he created. And that's what has happened with Whole Foods. A lot of people have copied us. That helps keep your edge," says Mackey. The deal by Amazon closed in August Today, Mackey still lives in Austin and purposefully drives by the location of the first store, which is now a school. He thinks of the past, but he also understands that to stay in business means evolution.
And I think it is important to have a good founder and entrepreneur but the great businesses continue to live on after the founder moves. In January of the following year, the first California store opened in Palo Alto.
Whole Foods next launched a private label called Whole Foods in January For the majority of the products in this line, the company sought out smaller manufacturers located in the "right" region--a salsa maker in Texas, a producer of pasta in Marche, Italy--who were committed to producing quality organic products.
The private label proved quite successful, generating healthy margins and brand loyalty that helped to encourage customers to return to Whole Foods Market despite an increasingly competitive market. In just a few years, the Whole Foods label included more than stock-keeping units SKUs within 22 categories. From the beginning Mackey espoused a team-oriented atmosphere at Whole Foods, believing that management and staff should work together to attain the company's goals.
In such an environment he believed that workers did not need unions, that they were "beyond unions. Picketing continued for the next 18 months to no avail. In the years that followed, similar union protests occurred at newly opened Whole Foods Markets in such union strongholds as Los Gatos, St. Paul, and Madison, Wisconsin. As Whole Foods expanded, however, the company decided that it needed a warehouse and distribution center in each of its regions to better serve its increasingly far-flung stores.
THD was eventually transformed into the central distribution center for the Southwest Region, serving stores in Texas and Louisiana. In November the company acquired Wellspring Grocery, Inc. Wellspring had been founded in March by Lex and Anne Alexander.
This buyout marked the beginning of Whole Foods' Southeast region. Unlike in previous purchases, this time Whole Foods decided to retain the Wellspring Grocery name, in order not to alienate existing customers.
In October , a third Wellspring opened its doors in Raleigh, along with Wellspring Distributors, which was launched to serve as the region's central distribution center. Lex Alexander stayed with Whole Foods, becoming director of private label products.
It had quickly become the largest chain of natural food stores in the country. Backed by this war chest, Whole Foods subsequently grew rapidly, moving in concert with a rapidly expanding industry. The name derived from the first store's unusual product line: natural foods and wooden toys. In they relocated the Brookline store to Brighton, Massachusetts. One other consequence of the buyout was that Mackey was accused of union busting, since the stores' employees had been unionized but voted against union representation following the takeover.
In February Whole Foods acquired a majority interest in The Sourdough: A European Bakery, which had been providing breads to the stores in Texas and Louisiana for a number of years. The move enabled the company to leverage the expertise of master bakers through an apprenticeship program. Whole Foods also went on to open bake houses in all of its operating regions. Over the next few years, additional stores were opened in the Chicago area, as well as in Ann Arbor, Michigan; St. Paul, Minnesota; and Madison, Wisconsin.
Also in , Peter Roy, who had been serving as president of the company's northern California region, was appointed president and chief operating officer in August. Mackey remained chairman and chief executive officer he had also been president; the COO position was new.
With the appointment, Whole Foods' regional presidents now reported directly to Roy, who was also charged with coordinating national purchasing, distribution, and vendor programs. Gooch's, which was the nation's number two retailer of natural foods at the time of the buyout, had been founded in by Sandy Gooch, a homemaker and former grade school teacher, and Dan Volland, who ran three health food stores in southern California.
The two opened the first Mrs. Gooch's in west Los Angeles in January , then added six more over the next decade. In the chain opened a distribution center, which, following the takeover, became Whole Foods' central distribution center for its new southern California region. Gooch's stores, which operated under the name Mrs. Click here to learn more. A leading-edge research firm focused on digital transformation. Good Subscriber Account active since Shortcuts. Account icon An icon in the shape of a person's head and shoulders.
It often indicates a user profile. Log out. US Markets Loading H M S In the news. Dennis Green. Before Whole Foods became Amazon's biggest subsidiary, it was a tiny organic grocery store in Austin, Texas. This is the story of how it got there. Visit Business Insider's homepage for more stories. By , it had merged with another local natural food store, Clarksville Natural Grocery, to open the first Whole Foods Market.
This original store was destroyed in a flood in , but the community rallied around it, and it ended up only being out of business for 28 days. Much of Whole Foods' growth was through mergers and acquisitions. It frequently moved into new markets by buying a local chain and converting it into a Whole Foods. By , Whole Foods had expanded to nearby Houston and had employees. In , workers at a Madison, Wisconsin, store voted to unionize, but it was never certified.
Mackey told The New York Times that he is anti-union and ignored workers' concerns, which led to the vote. Also in , Whole Foods expanded internationally for the first time with a store in Toronto. The store measures 58, square feet.
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